Ron Finke: It's the little things

This column might be shorter than most but it deals with a very important topic of personal financial health – the little things. Sometimes I have heard people say that they never have enough money to matter, certainly not enough to invest. However, even with inflation, the saying that if you take care of the dimes, the dollars will take care of themselves is still accurate.

By Ron Finke

Examiner

By Ron Finke

Posted Jun. 19, 2013 at 12:01 AM
Updated Jun 19, 2013 at 6:05 PM

By Ron Finke

Posted Jun. 19, 2013 at 12:01 AM
Updated Jun 19, 2013 at 6:05 PM

Independence, MO

This column might be shorter than most but it deals with a very important topic of personal financial health – the little things. Sometimes I have heard people say that they never have enough money to matter, certainly not enough to invest. However, even with inflation, the saying that if you take care of the dimes, the dollars will take care of themselves is still accurate.

I recall as a small boy that my mother took me shopping at the Milgrams on U.S. 24 Highway east of Noland Road. I remember that she never, ever bought me any candy or snacks while I was with her. Consequently, I quickly stopped asking for anything because it was a lost cause.

Now I appreciate that fact because frankly, I am not even tempted to stop for a cup of coffee or a soft drink at a convenience store and never have been. Sorry, Starbucks, you will have to make billions without me buying at the store. (Now ice cream is an entirely different matter – it's a food group for me.)

We gladly support the work of Hillcrest Transitional Housing in helping people progress from homelessness to financial health. One of its primary goals is to help folks to see the difference between a need and a want. Some homeless people will not enter the program and receive an apartment because they decide it is more necessary to stop every morning for a Dr. Pepper or Coke to drink than it is to have their own roof over their heads.

If a person begins in early adulthood to save some money for the long term, their future financial health and security is drastically improved. For example, if you began saving $2 a day at age 25 and invested it once a month into a fund that earned 7 percent per year*, at age 60 you would have $108,694, assuming it went into a Roth or other IRA or tax sheltered account.

Would that by itself make you wealthy? Absolutely not. But most Americans do not even have $100,000 they have personally saved by age 65. If the person increases his savings as his income rises, then it is still relatively easy to become moderately wealthy in our land. The hardest part is saving and protecting that $2 a day. Can we teach our children that much?

*Growth rate is hypothetical and not guaranteed.

Ron Finke is president of Stewardship Capital in Independence. He is a registered investment adviser. Reach him at rcfinke@stewcap.com.